COVID-19 Capital Costs Tax Credit Program 

New York State Governor Kathy Hochul announced that applications are now being accepted from small businesses with 100 or fewer employees for a new tax credit program that will allow them to recoup costs incurred to increase COVID-19 safety during 2021 and 2022. Applications for the COVID-19 Capital Costs Tax Credit Program will be accepted from businesses that have successfully completed the pre-screening process to determine eligibility.

Tax credits will cover 50 percent of eligible costs, up to $50,000, for a maximum tax credit award of $25,000, and credits will be awarded on a first-come-first-served basis until program funds are depleted. Eligible businesses must operate a location in New York State, have 100 or fewer full time equivalent employees, $2.5 million or less of gross receipts in the 2021 tax year, and have incurred at least $2,000 in eligible costs between January 1, 2021, and December 31, 2022.

• Eligible businesses will need to submit an application along with documentation to show proof of expenses for COVID-19-related costs, which include but are not limited to:
• Supplies to disinfect or protect against COVID-19 transmission
• Costs associated with expanding or defining space to accommodate social distancing
• Software and equipment for online payment platforms to enable delivery or contactless purchases
• HVAC equipment
• Expenses related to increased outdoor activity and outdoor space expansions
• Machinery and equipment to facilitate contactless sales

Applications will be accepted through March 31, 2023. To claim a tax credit for 2022 tax returns, businesses must apply soon to receive a tax credit certificate from Empire State Development (ESD) on or before December 31, 2022. Tax credits issued on or after January 1, 2023, can be claimed on a business's 2023 tax return.

If you have any questions, please contact Bob Gilbert at rgilbert@citrincooperman.com or a member of the State and Local Tax (SALT) practice.